The Top 40 in Review

It’s been nine years since EC&M first started tracking the financial and business performance results of the top players in the electrical design field. During this stretch, the market has certainly experienced some highs and lows — as all of you can attest to. This got me thinking. How had the overall performance of this powerful group of players tracked during this turbulent time frame? I started my review by going back and taking note of the overall design services revenue total for all 40 firms each and every year. The results were quite interesting. In 2006, this figure peaked at $20.4 billion. The following year, 2007, this total hit rock bottom, coming in at $13.7 billion. However, almost every other year this total hovered around the $18.5 billion mark. The only outlier in this group was reported in this year’s Top 40 cover story, starting on page 18, which revealed a total of $16.9 billion for the group’s performance in 2010. However, this total would most likely have been right around the $18 billion mark too if one of our long-term key players had continued to support our research and completed its survey. This absence clearly dropped our total down by about $1 billion.

On the business side of the equation, diversification and expansion has been the core focus for these power players over the past nine years. When key U.S. markets started to tank in the early to mid 2000s, many firms were forced to shift their focus to new market segments or seek out overseas opportunities. Some did this on their own while others formed strategic partnerships with already established design firms. A few followed a “growth through acquisition” strategy in an effort to gain an immediate presence in new market segments. Other growth strategies emerged in the way in which projects are delivered. Design/build projects took hold around 2005, giving owners a single point of responsibility for the design and construction of their projects. This strategy also allows electrical design firms to gain a seat at the owner’s table early on in the project, allowing them to offer design-saving tips prior to the start of construction and helping them form key business and personal relationships with owners and general contractors. The popularity of this project delivery method, which has taken hold in many public and private sectors, shows no sign of letting up.

My review of past Top 40 reports also revealed the importance of keeping pace with technology. On the engineering design front, our top 40 players relied on 3D CAD software to gain traction. This quickly led to the emergence of building information modeling software, which is now in demand by many owners and general contractors.

So what does the future hold for the top players in the electrical design field? A focus on sustainable energy systems and the use of energy-efficient building products (i.e., “green building”) appears to be more than a passing fad. So does the integration of renewable power supply systems in many new buildings and facilities. The only way for these firms to maintain their elite ranking is retain, train, and grow new engineering talent at all levels of their organization.

Speaking of rankings, I’d like to wrap this review up by letting you know that we’ll be tweaking our top engineering firm’s listing next year. It’s always been our goal with this report to rank the firms in our annual listing by electrical design revenue only. In fact, we’ve published a secondary listing of these rankings for quite a few years now, featuring approximately 25 of the 40 firms. Based on these reporting results, we now feel it’s a good time to refine our original listing and present only the Top 25 Design Firms ranked by revenue related to electrical design work only. So if you think your firm ranks as one of the elite electrical design groups in the country, then pass a note along to your management team and encourage them to participate in our 2012 survey and report.